Manama | November 9, 2020
Al Baraka Banking Group BSC (ABG), the leading Islamic banking group with its headquarters in the Kingdom of Bahrain, and which is traded at Bahrain Bourse and Nasdaq Dubai (under the trading code "BARKA"), achieved a net income attributable to equity holders of the parent of US$ 20 million in the third quarter of 2020 compared to US$ 28 million for the same period of 2019 with a decline of 28% due to significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact from COVID-19 on most economic sectors including the banking sector. The basic and diluted earnings per share for the third quarter of 2020 was US Cents 1.61 compared to US Cents 2.24 for the same period of 2019.
With regards to the results for the first nine month of 2020, the Group achieved a net income attributable to equity holders of the parent of US$ 67 million compared to US$ 84 million for the same period of 2019 with a decline of 20% due to significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact from COVID-19 on most economic sectors including the banking sector. The basic and diluted earnings per share for the first nine month of 2020 was US Cents 4.15 compared to US Cents 5.51 for the same period of 2019.
The Group allocated a significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and it’s unites. These provisions increased by 204% to reach US$ 217 million during the first nine months of 2020 compared to with US$ 71 million in the first nine months of 2019.
The statement of financial positions showed that the equity attributable to the parent's shareholders and Sukuk holders amounted to US$ 1.39 billion by end of September 2020 compared to US$ 1.47 billion by the end of December 2019, reflecting a decline of 5% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.16 billion by end of September 2020 compared to US$ 2.32 billion by end of December 2019, showing a decrease of 7%, due to the same reason.
Total assets of the Group showed an increase of 2% by end of September 2020 to reach US$ 26.91 billion compared to US$ 26.26 billion by the end of December 2019. The Group focused during the first nine months of 2020 on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units because of the COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 21.02 billion as at the end of September 2020, compared to US$ 19.75 billion at the end of December 2019, increasing by 6%. Customer accounts including due to banks and financial institutions as at the end of September 2020 reached US$ 23.17 billion, an increase of 3% compared to US$ 22.46 billion level at the end of December 2019, and represents 86% of total assets, which indicates the continued customer confidence and loyalty in the Group and the growing customer base.
During the third quarter of 2020, The total Group's net income was US$ 42 million compared to US$ 36 million for the same period of 2019 with an increase of 15%. The Group's total operating income increased by 22% during the third quarter of 2020 to US$ 287 million, compared to US$ 235 million during the third quarter of 2019 and net income for the period before net allowances for credit losses, impairment and tax increased by 61% to reach US$ 158 million compared to US$ 98 million during the same period.
During the first nine month of 2020, The total Group's net income was US$ 132 million, which is same level of profits achieved during the same period of 2019. The Group's total operating income increased by 24% during the first nine months of 2020 to US$ 839 million, compared to US$ 677 million during the same period of 2019. As a positive result of the Group's ability to control expenses, net income for the period before net allowances for credit losses, impairment and tax increased by 61% to US$ 432 million during the first nine months of the year 2020 compared to US$ 268 million for the same period last year.
Commenting on the performance and results of the Group during the first nine months of the year 2020, the Chairman of the Board of Directors of Al Baraka Banking Group, Mr. Abdullah Saleh Kamel, said, "The implications of COVID-19 continued during the past months worldwide economically, financially and socially, and governments stepped up their precautionary, health and financial procedures to combat and alleviate these repercussions. For the Group, we were able largely, thanks to God, and to our commitment to the true model of participatory banking, to face the repercussions on the Group and the units’ businesses, and we succeeded in maintain our results at satisfactory levels. At the same time, we worked closely and together with our customers, communities and other stakeholders to alleviate these repercussions and to provide the necessary support during his time.
Mr. Adnan Ahmed Yousif, member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said: "The spread of Corona pandemic created unprecedented challenges for banks and economies worldwide, and imposed implementing exceptional measures to alleviate the negative impact of the pandemic. In our Group, we launched several and comprehensive initiatives that do not only focus on maintaining the integrity of our financial conditions during the pandemic only, but also provide the required support to the societies in which we operate, and individuals, institutions and companies that deal with us, and at the same time maintain the sustainability of our services and the safety and protection of our employees."
Mr. Yousif added: “All these efforts have resulted in achieving good results during the first nine months of this year, thanks to God Almighty, and to the Islamic banking model that we adhere to, the exceptional efforts made by boards of directors, executive managements, and employees in the Group and units, the solidarity and support of our customers, and the prudent policies pursued by the central banks and governments in the countries in which we operate, so we extend our many thanks and praise to all of them”.
As for the group's network of branches, by the end of September 2020, it reached a total of 698 branches with 12,319 employees, which reflects the clear role of our units in creating decent jobs for citizens in their communities. The branching policy is one of the main pillars of the Group to achieve growth in business and profitability.
During last September, the International Islamic Rating Agency awarded Al Baraka Banking Group an international rating of BBB + (long term) / A3 (short term) and a local rating of (A + (bh) / A2 (bh) with a Mudarib score of '85-81 ', which is the highest level among Islamic financial institutions in the region. The Agency emphasized the positive growth in the Group's assets in 2019 and the strong privilege of retail deposits in the local markets which continues to provide stable and cost-effective financing to the Group's units.
With regards to the digital transformation, Mr. Adnan Ahmed Yousif said: “The pandemic imposed on institutions and banks to provide their services remotely, and ABG, thanks to God, proved the success of its strategies in the transition towards the digital banking that we launched two years ago, where we, at the Group and units levels, took the initiative to transform our electronic networks into integrated platforms to provide all the banking services needed by customers and other stakeholders. This has contributed greatly to providing security and safety for our customers and employees, and in the continuity of providing our banking services in an outstanding manner”.
The President & Chief Executive added “During the remaining months of the year, we will continue to maintain our balance and capabilities in dealing with the ongoing repercussions of the Corona pandemic by continuing to reinforce and develop the initiatives and strategies that we launched since the beginning of the year, hoping that we will conclude the year with good results that are consistent with our expectations and aspirations”.
This press release, along with the full set of financial statements, are available on the Bahrain Bourse website and on the Group website: www.albaraka.com
Key Performance Indicators
US$ millions
About Al Baraka
Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and Nasdaq Dubai. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.
The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through 698 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition to two branches in Iraq and representative offices in Indonesia and Libya.
ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of ABG is US$ 2.5 billion.
S&P Global Ratings has updated the long-term rating on Al Baraka Banking Group B.S.C. to 'BB-' with a 'Stable' Outlook, while affirming the 'B' short-term rating of the bank. ABG has also been rated BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.
Financial Ad
With regards to the results for the first nine month of 2020, the Group achieved a net income attributable to equity holders of the parent of US$ 67 million compared to US$ 84 million for the same period of 2019 with a decline of 20% due to significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact from COVID-19 on most economic sectors including the banking sector. The basic and diluted earnings per share for the first nine month of 2020 was US Cents 4.15 compared to US Cents 5.51 for the same period of 2019.
The Group allocated a significant increase in precautionary provisions to offset the adverse effect resulting from the negative economic impact of the COVID-19 pandemic on the businesses of the Group and it’s unites. These provisions increased by 204% to reach US$ 217 million during the first nine months of 2020 compared to with US$ 71 million in the first nine months of 2019.
The statement of financial positions showed that the equity attributable to the parent's shareholders and Sukuk holders amounted to US$ 1.39 billion by end of September 2020 compared to US$ 1.47 billion by the end of December 2019, reflecting a decline of 5% due to foreign currency translation reserve, payment of cash dividends and payment of Tier 1 profits during the year. Total equity reached to US$ 2.16 billion by end of September 2020 compared to US$ 2.32 billion by end of December 2019, showing a decrease of 7%, due to the same reason.
Total assets of the Group showed an increase of 2% by end of September 2020 to reach US$ 26.91 billion compared to US$ 26.26 billion by the end of December 2019. The Group focused during the first nine months of 2020 on maintaining a large portion of these assets in the form of liquid assets in order to face any emergency requirements of the units because of the COVID-19 pandemic.
Operating assets (financing and investments) amounted to US$ 21.02 billion as at the end of September 2020, compared to US$ 19.75 billion at the end of December 2019, increasing by 6%. Customer accounts including due to banks and financial institutions as at the end of September 2020 reached US$ 23.17 billion, an increase of 3% compared to US$ 22.46 billion level at the end of December 2019, and represents 86% of total assets, which indicates the continued customer confidence and loyalty in the Group and the growing customer base.
During the third quarter of 2020, The total Group's net income was US$ 42 million compared to US$ 36 million for the same period of 2019 with an increase of 15%. The Group's total operating income increased by 22% during the third quarter of 2020 to US$ 287 million, compared to US$ 235 million during the third quarter of 2019 and net income for the period before net allowances for credit losses, impairment and tax increased by 61% to reach US$ 158 million compared to US$ 98 million during the same period.
During the first nine month of 2020, The total Group's net income was US$ 132 million, which is same level of profits achieved during the same period of 2019. The Group's total operating income increased by 24% during the first nine months of 2020 to US$ 839 million, compared to US$ 677 million during the same period of 2019. As a positive result of the Group's ability to control expenses, net income for the period before net allowances for credit losses, impairment and tax increased by 61% to US$ 432 million during the first nine months of the year 2020 compared to US$ 268 million for the same period last year.
Commenting on the performance and results of the Group during the first nine months of the year 2020, the Chairman of the Board of Directors of Al Baraka Banking Group, Mr. Abdullah Saleh Kamel, said, "The implications of COVID-19 continued during the past months worldwide economically, financially and socially, and governments stepped up their precautionary, health and financial procedures to combat and alleviate these repercussions. For the Group, we were able largely, thanks to God, and to our commitment to the true model of participatory banking, to face the repercussions on the Group and the units’ businesses, and we succeeded in maintain our results at satisfactory levels. At the same time, we worked closely and together with our customers, communities and other stakeholders to alleviate these repercussions and to provide the necessary support during his time.
Mr. Adnan Ahmed Yousif, member of the Board of Directors and President & Chief Executive of Al Baraka Banking Group, said: "The spread of Corona pandemic created unprecedented challenges for banks and economies worldwide, and imposed implementing exceptional measures to alleviate the negative impact of the pandemic. In our Group, we launched several and comprehensive initiatives that do not only focus on maintaining the integrity of our financial conditions during the pandemic only, but also provide the required support to the societies in which we operate, and individuals, institutions and companies that deal with us, and at the same time maintain the sustainability of our services and the safety and protection of our employees."
Mr. Yousif added: “All these efforts have resulted in achieving good results during the first nine months of this year, thanks to God Almighty, and to the Islamic banking model that we adhere to, the exceptional efforts made by boards of directors, executive managements, and employees in the Group and units, the solidarity and support of our customers, and the prudent policies pursued by the central banks and governments in the countries in which we operate, so we extend our many thanks and praise to all of them”.
As for the group's network of branches, by the end of September 2020, it reached a total of 698 branches with 12,319 employees, which reflects the clear role of our units in creating decent jobs for citizens in their communities. The branching policy is one of the main pillars of the Group to achieve growth in business and profitability.
During last September, the International Islamic Rating Agency awarded Al Baraka Banking Group an international rating of BBB + (long term) / A3 (short term) and a local rating of (A + (bh) / A2 (bh) with a Mudarib score of '85-81 ', which is the highest level among Islamic financial institutions in the region. The Agency emphasized the positive growth in the Group's assets in 2019 and the strong privilege of retail deposits in the local markets which continues to provide stable and cost-effective financing to the Group's units.
With regards to the digital transformation, Mr. Adnan Ahmed Yousif said: “The pandemic imposed on institutions and banks to provide their services remotely, and ABG, thanks to God, proved the success of its strategies in the transition towards the digital banking that we launched two years ago, where we, at the Group and units levels, took the initiative to transform our electronic networks into integrated platforms to provide all the banking services needed by customers and other stakeholders. This has contributed greatly to providing security and safety for our customers and employees, and in the continuity of providing our banking services in an outstanding manner”.
The President & Chief Executive added “During the remaining months of the year, we will continue to maintain our balance and capabilities in dealing with the ongoing repercussions of the Corona pandemic by continuing to reinforce and develop the initiatives and strategies that we launched since the beginning of the year, hoping that we will conclude the year with good results that are consistent with our expectations and aspirations”.
This press release, along with the full set of financial statements, are available on the Bahrain Bourse website and on the Group website: www.albaraka.com
Key Performance Indicators
US$ millions
| Indicator | December 2019 | September 2020 | Growth % |
| Total Assets | 26,259 | 26,915 | 2% |
| Total financing and investments | 19,753 | 21,015 | 6% |
| Total customer deposits | 22,458 | 23,166 | 3% |
| Indicator | September 2019 | September 2020 | Growth % |
| Total operating income | 677 | 839 | 24% |
| Total operating expenses | 409 | 407 | -1% |
| Net operating income | 268 | 432 | 61% |
| Provisions | 71 | 217 | 204% |
| Net income - Group | 132 | 132 | 0% |
About Al Baraka
Al Baraka Banking Group B.S.C. (“ABG”) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain and is listed on Bahrain Bourse and Nasdaq Dubai. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.
The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in 17 countries, which in turn provide their services through 698 branches. Al Baraka Banking Group has operations in Jordan, Egypt, Tunis, Bahrain, Sudan, Turkey, South Africa, Algeria, Pakistan, Lebanon, Saudi Arabia, Syria, Morocco and Germany, in addition to two branches in Iraq and representative offices in Indonesia and Libya.
ABG and its Units offer retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of ABG is US$ 2.5 billion.
S&P Global Ratings has updated the long-term rating on Al Baraka Banking Group B.S.C. to 'BB-' with a 'Stable' Outlook, while affirming the 'B' short-term rating of the bank. ABG has also been rated BBB+ (long term) / A3 (short term) by Islamic International Rating Agency (IIRA). IIRA has also rated ABG on the national scale at A+ (bh) / A2 (bh) with a fiduciary score of 81-85, the highest level amongst Islamic Financial Institutions in the region.
Financial Ad